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What is the Chicago Board of Trade?

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  • Written By: Mary McMahon
  • Edited By: Kristen Osborne
  • Last Modified Date: 10 December 2016
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The Chicago Board of Trade is a market for financial futures and options based in the US city of Chicago. It has operated since 1848 and is believed to be the oldest operating example of a futures and options exchange in the world. Volume of trading tends to be very high on a daily basis, as Chicago is a financial powerhouse in the United States. Financial publications usually provide quotes on performance in this market, along with analysis and discussions of trading activities for investors, economists, and other interested parties.

Initially, the Chicago Board of Trade focused on agricultural commodities, particularly grains and pork bellies. Over time, the offerings expanded to include other commodities like gold and silver. The origins of modern trading in commodity futures are believed to lie at least in part with the Chicago Board of Trade. Traders can engage in open outcry trading in the so-called “pit” where traders interact directly with each other, or they can use an electronic trading system. Many firms use a combination of both to accomplish their goals.

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In 2007, the Chicago Board of Trade merged with the Chicago Mercantile Exchange, known as the “Merc.” A holding company, the CME Group, controls both entities, although they operate independently. The Merc and Board of Trade are open for trading Monday through Friday, with after hours trading available through electronic systems to allow people to trade during off hours. These two entities are publicly traded under the ticker symbol CME.

People interested in trading at the Chicago Board of Trade can seek a sponsor and become qualified for trading or go through a broker. Working with a broker can be advisable for people who have limited training and experience. For people who plan on building careers in trading, being sponsored by a brokerage company provides access to the trading floor, trading experience, and many other benefits. People need to pass a test to be allowed to trade and must observe basic rules of decorum to be allowed on the trading floor, in the interests of keeping the environment civil.

Since 1930, the Chicago Board of Trade has operated out of a famous building in downtown Chicago. In the heart of Chicago's financial district, the Board of Trade Building is noted for its Art Deco architecture, and it is considered a historic building. Visitors to the city sometimes visit the financial district to see this and other buildings of interest.

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